Print

[SLN]

Well the long awaited for news has arrived. The next round of VC funding for Prosper is in:
http://www.sociallending.net/news/prosper-com-closes-next-round-of-vc-funding/

[Xenon481]

Here is the direct link to the press release:

http://www.worldmarketmedia.com/market-data-1905/7849942-prospercom-closes-172-million-funding-round.aspx


It is interesting that Prosper has not released this on their website yet. It is not referenced under the Blogs nor Press Releases section.


Edit: Nominating Thread to The Lobby.

[Xenon481]

The following are quotes from SLN's blog post, not the press release:

Prosper has been on a steady growth curve for the last six months

No, they haven't.

http://www.ericscc.com/stats/prosper-loan-growth

Originated Dollar Amount for Loans Listed in March 2011: ~$5,200,000
Originated Dollar Amount for Loans Listed in April 2011: ~4,600,000

That is a recent ~11% decrease from month to month. May does appear to be likely higher than April, but the numbers are not yet finished for May, so we don't know where it will end up yet. Currently, loans listed in May 2011 have only originated ~$4,500,000.

and with this higher loan volume will certainly be reducing their cash burn rate as they start to generate more cash from operations.

This is not necessarily true, because they are having to give away incentives to get borrowers and lenders to use the platform. In the 1st Quarter of 2011, they gave away over 40% of their origination fees as incentives and promotions. Since then, Prosper has increased their incentive rate to 4% on a large portion of their loans. That isn't just giving their origination fees to lenders, it is actually giving away more than the origination fees on most of the loans. Prosper is having to PAY and take a loss on many loans originated just because of incentives alone.

I recently did some in depth calculations in a previous thread using Prosper's 2011 Q1 SEC filings:
http://www.prospers.org/forum/do_you_lend_on_lending_club_as_well_as_prosper_or_vice_versa-t24433.0.html;msg435348#msg435348

In there, I found that even if Prosper's non-loan(not directly, at least) based expenses stayed the same (very very unlikely), then Prosper would need at absolute minimum 9x-11x their current origination rate to have a positive cash flow. That is absolute minimum. With more likely figures, the numbers increased to 17x-27x their current origination rate.

And that is assuming that they are able to keep growing their origination rate without their incentives. With the incentives, they would likely have to increase origination rate by at least over 50x.


Edit: Had the wrong month names.

[312lender]

Wow Xenon! How pissed off are you! LOL!

[Xenon481]

Wow Xenon! How pissed off are you! LOL!

I'm just interested in the truth.

[kenL]

Was it a down-round?

[SLN]

Was it a down-round?

You can see all the previous funding rounds on their Crunchbase page:
http://www.crunchbase.com/company/prosper

This was their largest funding round ever.

[SLN]

No, they haven't.

http://www.ericscc.com/stats/prosper-loan-growth

Originated Dollar Amount for Loans Listed in March 2011: ~$5,200,000
Originated Dollar Amount for Loans Listed in April 2011: ~4,600,000

Xenon, I have always used the origination date for tracking loan volume. I saw the previous thread about the listing date numbers on Ericscc and while that may be more accurate in some ways, it doesn't allow for fluctuating investor dollars. I acknowledge that the numbers can be manipulated somewhat with the official numbers, but I am also interested in comparisons with Lending Club where the origination date is also used.

This is not necessarily true, because they are having to give away incentives to get borrowers and lenders to use the platform.

Point taken on this one. I don't have any hard numbers to back up my claim that increased volume will lead to lower cash burn rate, it was just an assumption based on vastly improved top-line revenue.

[Urbi_et_Orbi]

So, the existing investors had limited appetite?

[Urbi_et_Orbi]

Was it a down-round?

I wonder the same thing.

[mothandrust]

Prosper has been on a steady growth curve for the last six months

[312lender]

Prosper has been on a steady growth curve for the last six months.


There are 17.2 million reasons why this statement is accurate. 

It's obvious why this infusion is prospers
largest yet.

[kenL]

Prosper has been on a steady growth curve for the last six months

Listen guys. Prosper is growing. End of story.

Now that they have their funding I wouldn't be surprised if they originate 7 million this month.

[ira01]

Prosper has been on a steady growth curve for the last six months.


There are 17.2 million reasons why this statement is accurate. 

It's obvious why this infusion is prospers largest yet.

And why is that?  Prosper's originations were both growing faster, and were larger in absolute terms, four years ago.  Prosper originated over $8.8M in April 2007.  And Prosper wasn't giving away 4% bribes ("incentives") to lenders back then, either.  IMHO, all this latest infusion of money proves is that fools and their money are soon parted.  With luck, the class will wind up with a bunch of it.

[Xenon481]

Prosper has been on a steady growth curve for the last six months.


There are 17.2 million reasons why this statement is accurate. 

It's obvious why this infusion is prospers largest yet.

And why is that?  Prosper's originations were both growing faster, and were larger in absolute terms, four years ago.  Prosper originated over $8.8M in April 2007.  And Prosper wasn't giving away 4% bribes ("incentives") to lenders back then, either.  IMHO, all this latest infusion of money proves is that fools and their money are soon parted.  With luck, the class will wind up with a bunch of it.

+1

This is one of the best things that could have happened for the Class Action Lawsuit.